Renewable Energy Certificate Market Size, Share, Trends, Growth and Forecast 2030

Renewable Energy Certificate Industry Prospective:

The global renewable energy certificate market size was worth around USD 13.3 billion in 2022 and is predicted to grow to around USD 87.2 billion by 2030 with a compound annual growth rate (CAGR) of roughly 26.5% between 2023 and 2030.      

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Renewable Energy Certificate Market: Overview

The property rights to the environmental, social, and other non-power components of the production of renewable electricity are represented by a market-based instrument known as a renewable energy certificate or REC. When a renewable energy source produces and transmits one megawatt-hour (MWh) of electricity to the grid, a renewable energy certificate (REC) is granted. The development of the renewable energy certificate market is being driven by the growth of the environmentally friendly power sector, which includes rooftop solar chargers, small breeze turbines, and mini hydropower plants.

Key Insights

• As per the analysis shared by our research analyst, the global Renewable Energy Certificate market is estimated to grow annually at a CAGR of around 26.5% over the forecast period (2023-2030).
• In terms of revenue, the global Renewable Energy Certificate market size was valued at around USD 13.3 billion in 2022 and is projected to reach USD 87.2 billion, by 2030.
• The growing demand for renewable energy sources is expected to renewable energy certificate drive the market growth during the forecast period.
• Based on the energy type, the solar energy segment is expected to dominate the market over the forecast period.
• Based on the capacity, the more than 5000KWh segment is expected to dominate the market during the forecast period.
• Based on region, North America is expected to dominate the market during the forecast period.

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Renewable Energy Certificate Market: Growth Drivers

Growth of renewable energy drives market growth

A greater number of renewable energy projects are being produced as the field of renewable energy grows. A greater number of market players will be able to acquire and exchange RECs as a result of the rise in renewable energy generation. For instance, according to the report by Invest India, as of July 2023, India's built non-fossil fuel capacity—which includes major hydro and nuclear—stands at more than 179.322 Giga Watts, or 43% of the nation's total capacity, up 396% in the past 8.5 years. India saw the largest year-over-year growth of 9.83% in the addition of renewable energy in 2022. As of July 2023, the installed solar energy capacity has grown by 24.4 times over the previous nine years and is 67.07 GW. Since 2014, the capacity of installed renewable energy sources (including big hydro) has expanded by around 128%. Therefore, the aforementioned stats are expected to drive the global renewable energy certificate market growth during the forecast period.

Renewable Energy Certificate Market: Restraints

Policies uncertainties hinder market growth

Uncertainty in the REC market may result from changes in governmental policies and laws. The demand for RECs and the willingness of companies and utilities to participate in renewable energy projects can be affected by changing objectives, decreasing incentives, or eliminating requirements for renewable energy. Thus, this is expected to hinder the renewable energy certificate industry growth during the forecast period.

Renewable Energy Certificate Market: Opportunities

Increasing government initiatives offer a lucrative opportunity for market growth

The increasing government initiatives are expected to offer a lucrative opportunity for renewable energy certificate market growth over the forecast period. For instance, in September 2023, Gujarat unveiled a Renewable Energy Policy 2023 that aims to turn the country into a leader in renewable energy. The ambitious plan aims to create 100 GW of renewable energy capacity overall by the year 2030. This innovative project, which would use about 4,000 acres of land, is expected to draw investments totaling over 5 lakh crores. The goal of this policy is to promote flexibility and inclusion in the development of renewable energy sources. It covers both solar and wind energy projects, which may be built on government revenue land, inside authorized solar or wind parks, or even on private property.

Renewable Energy Certificate Market: Challenges

Lower voluntary adoption of RECs poses a major challenge to market growth

According to several studies, compliance-related purchasers purchase the majority of the renewable energy certificates sold. Only a small number of sales have been made as a result of voluntary REC takers. The growth of the renewable energy certificate market, which is fueled by issues like ignorance and inadequate enforcement, is the biggest challenge and requires more effective management.

Renewable Energy Certificate Market: Segmentation

The global Renewable Energy Certificate industry is segmented based on energy type, end-use, capacity, and region.

Based on the energy type, the global market is bifurcated into solar energy, wind power, hydroelectric power, and gas power. The solar energy segment is expected to dominate the market over the forecast period. The REC market has been significantly impacted by the expansion of the solar sector. There has been an increase in solar installations as a result of solar energy's rising affordability, efficiency, and scalability. The availability of solar RECs has consequently significantly increased as a result of this. For instance, according to the International Energy Agency, in 2022, the production of solar PV climbed by a record 270 TWh (up 26%), reaching approximately 1 300 TWh. In 2022, it outpaced wind for the first time in absolute generation growth among all renewable technologies. This generation growth rate is in contrast to what the Net Zero Emissions by 2050 Scenario anticipates for the years 2023 to 2030. Thereby, driving the segment expansion.

Based on the end-use, the global market is bifurcated into Voluntary and Compliance.

Based on the capacity, the global renewable energy certificate industry is divided into 0-1000KWh, 1100-5000KWh, and more than 5000KWh. The more than 5000KWh segment is expected to dominate the market during the forecast period due to the fast expansion of renewable energy sources for the production of electricity and the financial support given by governments and the business sector to the construction of wind and solar farms across the world.

Renewable Energy Certificate Market: Report Scope

Renewable Energy Certificate Market: Regional Analysis

North America is expected to dominate the market growth over the forecast period

North America is expected to dominate the global renewable energy certificate market during the forecast period. The growth in the region is attributed to the favorable regulatory landscape. The Renewable Portfolio Standards (RPS/RES) or Renewable Energy Standards (RES) have been put into place by several states in the US. According to these regulations, a specific amount of power must be generated from renewable resources. In these states, utilities and energy suppliers employ RECs to fulfill these criteria, leading to a substantial demand for RECs. Moreover, the growing integration of renewable energy capacity is also propelling the market growth over the forecast period. For instance, according to the US Department of Energy, at the end of 2022, more than 263,000 American workers had dedicated the majority of their time to solar. A further 82,250 employees spend less than half of their time working on solar-related projects. The greatest Q1 ever, the United States built 5.7 GW alternating current (GWac) and 6.1 GW direct current (dc) of PV in 2023; a sizeable amount of this was in Texas, Florida, and California. In addition, as per the data by the US Energy Information Administration, in the United States, a record amount of new utility-scale solar power was added in 2021. According to the Preliminary Monthly Electric Generator Inventory, 17.6 gigawatts (GW) of additional utility-scale solar power went online between June 2021 and June 2022, bringing the total U.S. utility-scale solar capacity to 65.8 GW. 10% (14.3 GW) of the 137.6 GW of wind energy capacity installed in the United States between June 2021 and June 2022. Thus, these stats propel the market growth during the forecast period.

Asia Pacific is expected to grow at the highest CAGR in the renewable energy certificate industry during the forecast period. The market growth in the region is attributed to the growing focus on renewable energy sources especially in the countries like China and India. One of the world's biggest markets for renewable energy is China. To aid in the growth of renewable energy, it has developed a nationwide REC system known as the Green Certificate Trading Scheme. In addition, the Renewable Purchase Obligation (RPO) program, which requires utilities to either purchase RECs or get a specific amount of their power from renewable sources, has helped India develop a well-established REC market. Thereby, driving the market growth over the forecast period.

Renewable Energy Certificate Market: Competitive Analysis

The global Renewable Energy Certificate market is dominated by players like:

• the Environmental Tracking Network of North America
• General Services Administration
• Western Area Power Administration
• the U.S. Environment Protection Agency
• Green-e Energy
• Defense Logistics Agency Energy
• Central Electricity Regulatory Commission

The global Renewable Energy Certificate market is segmented as follows:

By Energy Type

• Solar Energy
• Wind Power
• Hydroelectric Power
• Gas Power

By End-Use

• Voluntary
• Compliance

By Capacity

• 0-1000KWh
• 1100-5000KWh
• More than 5000KWh

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa